On July first Hong Kong will mark the 10th anniversary of Chinese sovereignty. For the past decade, the city has been ruled under a "one country, two systems" formula designed to give the territory a wide degree of autonomy. VOA's Joseph Mok recently traveled to the so-called "Pearl of the East" to look at how things have changed for the people of Hong Kong over the past decade. Jim Bertel narrates.

Victoria Park. It Is early in the morning, just after seven o'clock. People are practicing tai chi, and modern dance.

Before starting work, many in Hong Kong first come here to exercise. As the political and economic situation changed following the handover in 1997, society and people's livelihoods underwent a comparable transformation. An aging population, medical retirement, the minimum wage, new immigrants from mainland China, are among the mounting social issues facing the Hong Kong government.

Chung Kim-wah is an assistant professor at Hong Kong University for Science and Technology. He thinks the lowest levels of Hong Kong society have not benefited directly from the recent economic revival. "When the handover happened in '97, in a population that had more than three million workers, there were about 300,000 people with annual incomes below $5,000 Hong Kong. But, if you look at the numbers for last year, the number of Hong Kong people with incomes under $5,000 was more than 500,000!"

During that same period, he says, the number of high income families grew slightly while those of middle income dropped by nearly ten percent.

Many people are worried by the trend of this wealth gap. After Hong Kong's handover, an economic depression catalyzed a polarization of rich and poor.

Jou Pei-jung, who opened a t-shirt store that year, is a typical example of a victim of the financial crisis. Jou went from having a considerable daily income to a situation where he was racking up large debts and his wife had to find work. Things got so bad he even considered suicide.

Instead, he set out on a fresh life path. Jou now works as an office messenger while his wife sells baby diapers. But Jou says the couple can only work a little more than ten days a month because employers do not want to pay them over $5,000 Hong Kong annually. Otherwise they have to pay into a mandatory retirement fund.

Fung Kai-yuen works with the Hong Kong Confederation of Trade Unions and is constantly fighting for workers' rights and interests. He observes that there are a large number of immigrants from mainland China among the low-income population.

In addition, Fung is concerned about aging workers and their medical retirement. He says many workers in Hong Kong have to work well beyond the age of 65.

"This point reflects that Hong Kong's retirement welfare system is very poor. Right now, the government is promoting Mandatory Provident Fund (MPF) schemes. But some scholars have calculated that even if someone works enough hours, as far as low-income workers are concerned, it still isn't enough to live on for four or five years past retirement."

Recently, the Fung's organization formulated a proposal for safeguarding worker's rights and interests. The main points include: passing a minimum wage law; creating laws and regulations establishing a 44 hour work week; and improving work safety and on-the-job injury codes.

When the economy revived last year, the Hong Kong government brought in a surplus of $55 billion Hong Kong. Many people think that windfall makes now the right time for the Hong Kong government to take radical measures to tackle social issues.